The housing market isn’t immune to shifting tastes, priorities, and economic pressures. Some types of homes that once seemed like smart investments are now starting to lose their appeal – and with it, their value.
As buyers get more selective and trends evolve, certain properties are falling out of favor faster than others.
If you’re thinking about buying, selling, or simply watching the market, it’s worth knowing what to avoid. These 10 types of homes are expected to drop in value by the end of 2025 – plus 5 that are already seeing steep declines.
1. McMansions Built In The Early 2000s
Remember those massive cookie-cutter luxury homes that popped up everywhere during the housing boom? Their excessive size and dated features are falling out of favor with today’s buyers.
Young homeowners particularly dislike their inefficient layouts, high maintenance costs, and energy-guzzling systems. Many of these properties feature design elements that now look painfully outdated.
2. Homes Near Rising Sea Levels
Waterfront living isn’t the safe investment it once was. As climate concerns intensify, properties in flood-prone coastal areas face increasing insurance costs and decreasing buyer interest.
What’s driving this decline? Insurance companies are retreating from high-risk zones, making ownership prohibitively expensive. Meanwhile, scientific projections of sea-level rise are becoming harder for buyers to ignore.
3. Houses With Outdated Floor Plans
Gone are the days when maze-like layouts with tiny, closed-off rooms attracted buyers. Modern life demands open, flexible spaces that adapt to changing needs.
Homes with formal dining rooms, small kitchens isolated from living areas, and narrow hallways are increasingly viewed as renovation projects rather than move-in ready options.
4. Properties In Declining Rural Areas
While some rural areas are booming, others face a perfect storm of population loss, aging infrastructure, and diminishing services. Small towns hit by factory closures or agricultural decline present particular risks.
Schools closing, hospitals consolidating, and businesses shuttering create a downward spiral for property values. Young people continue migrating to urban centers or thriving suburbs, leaving fewer potential buyers in these markets.
5. Luxury High-Rise Condos In Oversaturated Markets
Sleek glass towers have sprouted like weeds in many urban centers, creating a glut of similar luxury units. Cities like Miami, New York, and Seattle are seeing supply outpace demand.
When developers rush to capitalize on luxury trends, they create fierce competition among sellers. Identical units with minimal differentiation become commodities, driving prices down as buyers gain negotiating power.
6. Homes With Pool-Centric Backyards
Splashing into a backyard pool used to be the ultimate status symbol, but today’s buyers often see them as money pits. Maintenance costs, safety concerns, and environmental awareness are changing perspectives.
Water restrictions in drought-prone areas make pools less practical. Insurance premiums climb higher each year, while families increasingly worry about the environmental impact and ongoing chemical expenses.
7. Energy-Inefficient Older Homes
Drafty windows, poor insulation, and outdated HVAC systems are becoming serious liabilities in the housing market. As energy costs rise and climate consciousness grows, these homes face steep value declines.
Buyers increasingly calculate the total cost of ownership, not just purchase price. When utility bills run hundreds more per month than in efficient alternatives, buyers adjust their offers accordingly.
8. Properties With Extensive Customization
Uniqueness isn’t always an asset in real estate. Highly personalized homes with unusual features often struggle to find buyers willing to pay for someone else’s vision. Think converted garages, basement bowling alleys, or bedrooms transformed into specialty spaces.
While these modifications may perfectly suit the current owner, they severely limit the pool of potential buyers.
9. Vacation Properties In Oversaturated Markets
The vacation home boom triggered by the pandemic has created surplus inventory in many popular destinations. As travel normalizes and remote work policies evolve, demand is softening in previously hot markets.
Short-term rental restrictions are also tightening in many communities, eliminating income potential that justified premium prices. Rising insurance costs in coastal and mountain areas add another financial burden.
10. Homes With Extensive Lawns And Water-Hungry Landscaping
Lush green lawns once symbolized suburban success, but environmental awareness and water scarcity are changing attitudes. Properties featuring expansive turf and thirsty ornamental plants face increasing market resistance.
Water bills in drought-prone regions have skyrocketed, making maintenance costs prohibitive. Watering restrictions can turn once-beautiful landscapes into brown eyesores almost overnight.
1. Homes With Limited Internet Connectivity
In today’s connected world, high-speed internet access isn’t just a convenience—it’s essential infrastructure. Properties in broadband deserts face significant disadvantages in attracting buyers.
Remote work has transformed internet connectivity from a nice-to-have into a must-have feature. When video conferencing freezes or downloads crawl, productivity and quality of life suffer.
2. Homes In Areas With Declining School Districts
Nothing impacts residential property values quite like school quality. When districts face funding cuts, teacher shortages, or declining test scores, nearby homes often follow the downward trend.
Families with children will pay premiums for good schools and avoid areas with struggling education systems at all costs. This creates a self-reinforcing cycle as property tax revenues fall alongside home values.
3. Properties In Areas With Crumbling Infrastructure
Imagine turning on your tap to find brown water or navigating pothole-filled streets every day. Infrastructure failures dramatically impact property values, sometimes almost overnight. When water systems, roads, bridges, and public utilities deteriorate without repair plans, buyer interest evaporates quickly.
News coverage of infrastructure problems can trigger rapid market responses. Even well-maintained homes suffer when surrounded by crumbling public systems, as buyers calculate the likelihood of special assessments, tax increases, or continuing decline.
4. Starter Homes In Baby Boomer Retirement Areas
Generational shifts are reshaping entire neighborhoods. As Baby Boomers downsize or move to care facilities, some areas face a surplus of modest homes without enough young buyers to absorb them.
Millennials and Gen Z often prefer different locations and housing styles than previous generations. When retirement communities see mass turnover without replacement buyers, values inevitably decline.
5. Homes With Dated Luxury Features
Yesterday’s must-have luxury features are today’s renovation projects. Jetted tubs, elaborate media rooms, and ornate finishes that defined high-end homes in previous decades now signal expensive updates ahead.
Granite countertops once commanded premium prices but are increasingly viewed as ordinary or dated. Massive whirlpool tubs gather dust while buyers seek large walk-in showers and smart home technology.